In accordance with the measures taken due to the extraordinary situation and the Government Decree of 10 April 2020, the annual general meeting of Appeninn cannot be held, so instead the Board of Directors of the company is entitled to make decisions with regard to the previously disclosed items on the agenda. Based on the decision of Appeninn Nyrt., the Board of Directors decided on the items on the agenda, which are subject to a deadline, or due to the business character of which, may not be postponed, while other proposals will be addressed by the general meeting to be convened at a later time. The Board of Directors of the company approved the 2019 financial statements, with the top highlight being that the value of properties owned by Appeninn Nyrt. increased by 25%, from EUR 118 million to EUR 148 million – an equivalent to some HUF 50 billion -, and the 2019 comprehensive profit of the company for the reporting year was more than EUR 10.2 million, that is over HUF 3.3 billion.
Dividend payments were also decided upon: as the company keeps focusing on dynamic growth in the coming years, the Board of Directors approved the provisioning of the entire year’s after-tax profit, which is also justified by the extraordinary conditions related to the global pandemic.Furthermore, the Board of Directors also decided on the authorisation of the purchase of own shares. Consequently, Appeninn Nyrt. is authorised to purchase own shares which option will be made use of by the company in the near future. According to the company’s management, the purchase of own shares can be regarded as a sign of confidence placed in the future of Appeninn Nyrt., and also a means to achieve the company’s strategic goals. In accordance with the decision, the Board of Directors may purchase own shares for 18 months up to 5% of the equity in a price range of +/- 20% of the market price from-time-to-time.
The 2019 activity of Appeninn Nyrt. was focused on the implementation of the growth strategy. The company’s main milestones for 2019 included the purchase of Club Aliga, and besides the research of potential investment targets, it started portfolio cleansing as well by the sale of properties outside of its focus areas. The company also issued bonds of HUF 20 billion in the Bond Funding for Growth Scheme issued by the Hungarian National Bank, generating significant funds, which may be spent on the implementation of the updated growth strategy.
In accordance with the company’s updated strategy, tourism development projects will be emphasised in the future: the comprehensive renovation of Club Aliga and the port area of Balatonfüred acquired in the beginning of the year as well as hotel construction in both areas are amongst the plans of the property company, which are well aligned to the company’s business strategy. By way of the tourism development projects, Appeninn Nyrt. aims at participating in the transformation of the Balaton region into a tourism hub of Central Eastern Europe. As a new strategic direction, the company is set to present the principles of value saving and value creation in the course of its activities in an ever more predominant fashion.
Indeed, global conditions of present times impact the activity of Appeninn Nyrt.; however, the rate of tenants that had to suspend their operation in accordance with the Government Decrees is low. Furthermore, the company’s unoccupancy rate is 7 percent, whereas general lease duration is 4.5 years. The company’s tourism development projects are not impacted by this situation, as investment projects go on for several years, thus Appeninn Nyrt. is expecting that tourism will pick up by the time these projects enter the profit generation phase. Appeninn Nyrt. has significant liquidity reserves, and is able to fulfil its financial liabilities in time even with the expected loss of revenue and restructuring. Nevertheless, the company, in order to protect tenants, will take all precautionary measures that may help the slowdown of the pandemic, and maintain continuous operation.
The conditions of stable growth were established last year, which may be further enhanced by the update of the company’s growth strategy. Besides the property market, Appeninn Nyrt. aims at active presence on the capital market too: the purchase of own shares is planned to be performed as soon as possible, further strengthening shareholder value. Even though due to the extraordinary economic environment, extra care and the continuous evaluation of the situation may be justified, Appeninn Nyrt., as a capitalised corporation, can continue to grow, and in line with the updated strategic directions, may generate significant growth in financial profits too.